Securities Law

Whistle-Blowing to the SEC Is About to Become More Profitable

A $1 million reward announced Friday for a whistle-blower in an insider trading case was the largest ever paid by the Securities and Exchange Commission. But that amount may pale in comparison to amounts the agency is authorized to dole out under new financial reform legislation. The new law, the…

Jul 27, 2010 1:01 PM CDT

SEC Paid an Ex-Wife $1M for Information in Pequot Case

The Securities and Exchange Commission paid $1 million for information in an insider trading case against the founder of Pequot Capital Management. The money went to Karen Kaiser, who is the ex-wife of a former Microsoft employee who went to work for Pequot, the Wall Street Journal (sub. req.) reports.…

Jul 26, 2010 11:23 AM CDT

Despite Economic Debacle, Criminal Cases are Rare and Hard to Prove

As the fallout continues from the biggest financial crisis in 80 years, there has been exactly one major related criminal conviction–for Bernard Madoff’s stupendous Ponzi scheme, reports the Wall Street Journal (sub. req.). But other well-known figures in the debacle have, so far, escaped severe penalties for deliberate fraud, the…

Jul 23, 2010 12:38 AM CDT

Conrad Black Released on Bond After Some $40M in Legal Bills; How Much More Can He Afford to Pay?

Freed today from a federal prison in Florida, onetime media mogul Conrad Black is seemingly potentially on track for a possible reversal of his fraud and obstruction of justice convictions. But a major roadblock remains: His legal fees. An estimated $40 million in defense costs for Black have been covered…

Jul 21, 2010 11:29 PM CDT

Judge Tosses Shareholder Suit Against AmEx, Hits ‘Hydra-Like Complaint’

A federal judge in Manhattan has dismissed a proposed shareholder class action against American Express, calling the allegations “a classic example of fraud by hindsight.” U.S. District Judge William Pauley said there was no evidence that the company’s chief financial and executive officers were aware of fraud or acted in…

Jul 21, 2010 1:00 PM CDT

Death of Reed Smith Practice Leader Struck by Train Ruled a Suicide

A senior partner at Reed Smith committed suicide last week, dying of multiple injuries after being struck by a commuter train in Chicago. Stewart Dolin was a corporate and securities partner who headed practice groups both at Reed Smith and, before it merged with Reed Smith, at Sachnoff and Weaver,…

Jul 20, 2010 11:40 PM CDT

UK Lawyer Debuts New ‘Annuity-Based’ Law Firm Whose Clients are Also Law Firm Investors

Forget cash flow. Equity is where it’s at, as far as the law firm of the future is concerned, predicts a well-known lawyer who is now venturing out to stake his claim to this brave new world. Only three years ago, Matthew Hudson was about to take the helm of…

Jul 19, 2010 10:43 PM CDT

Who Really Won? Record $550M SEC Fine No Big Deal to Goldman Sachs, Says NY Times

Goldman Sachs agreed to pay a record-breaking $550 million fine as part of a settlement announced last week with the U.S. Securities and Exchange Commission of charges that the bank misled investors when it offered mortgage-related securities that turned out to be toxic in a dismal real estate market. But…

Jul 19, 2010 8:53 PM CDT

Battered By Months in Jail, Onetime Billionaire Stanford Says His Defense Is Suffering

Blind in one eye after a jail fight, suffering from other ailments and taking anti-depressants, onetime billionaire R. Allen Stanford is finding it tough to defend the criminal case he is facing over an alleged $7 billion fraud from his cell at the federal detention center in Houston. Denied bond…

Jul 16, 2010 5:26 PM CDT

S&C’s Cohen Says Financial Bill Passed by Congress Has ‘Substantial Teeth’

A financial reform bill passed by Congress on Thursday has “substantial teeth,” according to a lawyer who represented seven financial firms in financial bailout negotiations as the economy neared a meltdown. In an interview with Bloomberg Television, Sullivan & Cromwell senior chairman H. Rodgin Cohen countered critics who said the…

Jul 16, 2010 12:42 PM CDT

Goldman Sachs to Pay Record $550M to Settle SEC Suit re Claimed Mortgage-Related Fraud

Accused of misleading investors when it foresaw the mortgage meltdown and offered toxic mortgage-related securities that hedged against it, Goldman Sachs has agreed, without admitting liability, to a record payment of $550 million. The banking titan was sued by the U.S. Securities and Exchange Commission in April. Of the $550…

Jul 15, 2010 9:08 PM CDT

Ex-SEC Lawyer Avoids Prison for Role in Marc Dreier Fraud Scheme

A former lawyer in the enforcement division of the U.S. Securities & Exchange Commission won’t be going to prison for his role in lawyer Marc Dreier’s fraud scheme. Robert Miller was sentenced on Wednesday to two years of supervised release for helping Dreier sell more than $44 million in fake…

Jul 8, 2010 3:16 PM CDT

SEC Sues Money Manager Who Invested in Sandwich-in-a-Can Business

The Securities and Exchange Commission claims in a lawsuit that a Utah money manager promised to place investor money in commercial real estate but instead put the funds into a sandwich-in-a-can business and other ventures. The suit claims Travis Wright of Draper, Utah, collected $145 million from 175 investors, but…

Jul 8, 2010 1:52 PM CDT

Appeals Court Says ‘See No Evil’ Approach Can’t Shield Law Firm in Investor Suit

A “see no evil, hear no evil” approach can’t shield a law firm from an aiding-and-abetting claim in an investor suit, a New York appeals court has ruled. The appeals court reinstated the claim against Lum, Drasco & Positan, formerly known as Lum, Danzis, Drasco & Positan, the New York…

Jul 7, 2010 1:33 PM CDT

Ex-SEC Lawyer to Get $755K in Whistle-Blower Settlement

Without admitting wrongdoing, the Securities and Exchange Commission has agreed to pay $755,000 to settle a former staff lawyer’s wrongful termination whistle-blower suit. Gary Aguirre had contended that he was abruptly fired in 2005 because of his investigation of a potential insider-trading case against a giant hedge fund, Pequot Capital…

Jun 29, 2010 9:12 PM CDT